Chris Sally, Downtown Development Manager for the Economic Development Corporation of Kansas City, is enthused. "This is the most important piece of legislation for downtowns throughout Missouri since the state historic credits were enacted!" he exclaims.

What he's talking about is the new Missouri Downtown Economic Stimulus Act (MODESA) which will provide new state redirected revenue for "major initiative" projects to revitalize urban cores of cities and towns throughout Missouri and provide an economic stimulus for Missouri's economy.

Of course, he is mostly interested in the area encompassed by Oak to the east, Wyandotte to the west, Truman Road to the south and 12th Street to the north. It encompasses the SoLo district, which includes the new performing arts area.

"This area is the front door to our downtown--it's blighted and unwelcoming now," he emphasizes. Such a project will change everyone's perception of downtown."

"Major initiatives" are those that promote tourism, cultural activities, arts, entertainment, education, research, multipurpose facilities, libraries, ports, mass transit, museums and conventions, or business locations or expansions creating new jobs within three years. In Kansas City (and St. Louis), to qualify, the threshold is $10 million and the project must create 100 new jobs.

There are other qualifications. It can only be used in Missouri's historic downtowns which are not in a flood plain and whose development area does not exceed 10% of the entire municipality's land. The median income for the municipality must be below $62,000. At least 50% of the development area's buildings must be in excess of 35 years old. The area must have had declining population or taxes for the prior 20 years. With MODESA, all those grim characteristics suddenly become "benefits" which garner the city tax dollars. Huzzah!

The legislation will provide new state and local revenue at a time when cities are hurting. New revenue will be created in the form of Missouri sales tax of up to 1.5 % (total of Missouri sales tax is 4.225%) and up to half of the Missouri income tax through withholding (income tax can be as high as 6%), which would be used to improve public infrastructure, parking, environmental remediation, and land acquisition.

In a compromise amendment to give Kansas City more ammunition to respond to Kansas incentives such as the STAR bonds, Kansas City was given the opportunity to use up to 2% (instead of only 1.5 %) of Missouri sales tax on two retail projects to be approved prior to December 31, 2006. An interesting aspect is that any project must pass a "but for" test to receive state participation. In other words, the project could not be realized unless there is state participation. A positive cost-benefit analysis is required at the local level for the municipality and school district and then at the state level to be performed by the Department of Economic Development on the fiscal impact on the state. Also, a local contribution of incentives is required to access the state redirected revenues. Governor Bob Holden will sign MODESA into law in June and then it will take effect on August 28, 2003. After that, prospective developments using MODESA will come before the Greater Downtown Development Authority for initial review.

"MODESA will be a great new tool to attract new jobs to Downtown Kansas City. This will be an economic development tool which will have a long-term positive impact not only on Downtown, but all of Kansas City, Missouri. We now have a tool that allows us to compete," said Greg Williams, who is Legislative Assistant to Mayor Kay Barnes.